LONDON: Britain’s state-rescued Royal Bank of Scotland yesterday said net losses more than doubled in the first quarter owing to an exceptional payment back to the government.
Losses after tax in the first three months of the year stood at £968m ($1.4bn), which compared with a net loss of £459m in the first quarter of 2015, RBS said in an earnings statement. Pre-tax profits came in at £421m, up from £37m.
However the bottom-line net figure was hit by RBS having to pay the government almost £1.2bn in order to allow the bank to begin paying dividends again.
“An attributable loss of £968m included payment of the final Dividend Access Share (DAS) dividend of £1,193m to the UK government,” RBS said. In morning deals following the results, RBS shares were among the biggest fallers in London, losing 3.2 percent to 237 pence, with analysts pointing to the higher-than-expected net loss. The capital’s benchmark FTSE 100 index was down 0.7 percent overall at 6,279.1 points.
“The big question is whether there is light at the end of the tunnel, and whether RBS has turned the corner, or whether the days of over promising and under delivering are set to continue,” said Michael Hewson, chief analyst at trading group CMC Markets.
“There is some good news in that the underlying business did manage to post an operating profit of £421 million, but it does appear that the recent market volatility and low interest rate environment that has blighted the performance of its sector peers has also hit” RBS, he added.
The Edinburgh-based lender remains around 73 percent owned by the British government after it was saved with £45.5bn of taxpayers’ cash at the height of the 2008 global financial crisis -- resulting in the world’s biggest banking bailout.
“The company has now racked up more than £50bn in losses since the crisis -- more than the £45 billion forked out to save it,” said Joe Rundle, head of trading at ETX Capital.
AP
